Case Study: Dekel Oil
Dekel Oil are a relatively young company who listed on the London Stock Exchange in 2013. The company has an oil palm plantation and ambitions to be the biggest producer of PKO in the area. They are currently the second largest producer of PKO ( Palm Kernel Oil) in Cote D’Ivoire in just two years.
The initial investment included:
- Building a nursery for plants
- Irrigation system
- Planting 2,000 hectares
- Contracting out growers on a scheme
- Planning and constructing a processing mill
There is currently a lack of capacity for processing oil palm in Cote D’Ivoire and so Dekel Oil are in the process of building a processing facility. The result of this 30 million Euro investment will be operational in 2014 and will process 70,000 MT of palm oil in a year.
Social and Corporate Responsibility makes good business sense
A large problem with opening processing facilities and a reason many projects fail is a lack of capacity of raw product. To ensure that Dekel Oil don’t run out of fruit, they have contracted 5,000 local and regional farmers as out growers.
Business benefits for out growers scheme
- Increased capacity lowers milling costs and makes the product more profitable
- Supporting locals increases goodwill towards your business
- Pay 5,000 out growers supports 50,000 people – families, shops, drivers, schools
Ease of doing business
Dekel Oil report that doing business in Cote D’Ivoire has been a really good experience. Benefits of doing business in Cote D’Ivoire are:
- Good economic growth potential
- Good infrastructure available
- Good roads
- New port
- Labour force that know about farming
In addition, the government are keen to attract inward investment that benefits the country and its people. Businesses like this one make everyone a winner.
Written by Fiona Johnson
6th November 2013
This information came from a presentation given at the Park Lane Hotel on 30.10.13 as part of a DMA Trade & Investment Forum.